Bridgestone to Buy US Auto Parts Retailer Pep Boys

This file photo from July 31, 2003 shows Pep Boys mascots Manny, Moe, and Jack above a store location in West Philadelphia. Tire and auto service company Bridgestone on Monday, Oct. 26, 2015 said it is buying auto parts and repair company Pep Boys in a deal that will help it gain a more dominant position. (AP Photo/Mark Stehle, File)

Japanese tire maker Bridgestone Corp. said it would buy auto parts retailer Pep Boys-Manny, Moe & Jack for $835 million to expand its retail presence in the United States.

The deal will boost Bridgestone's retail network by more than a third in the United States, the company said.

Bridgestone operates a chain of auto care and tire stores in the United States through its Bridgestone Retail Operations (BSRO) unit.

"Bridgestone is looking to expand its market share in services and tires ... it's a little harder to understand what they might do with (Pep Boys') retail operations but they'll come up with a plan for it," Jefferies analyst Bret Jordan said, adding that it was unlikely the company would get rival bids from strategic buyers.

Bridgestone's U.S. business accounts for nearly half of its total sales, according to Thomson Reuters data.

The company, founded in 1921 by four friends who pooled together $800 to open an auto parts store in Philadelphia, will add about 800 locations to BSRO's existing 2,200 centers.

Pep Boys has been on the block since June, when it said it was considering selling itself as part of a strategic review.

Unlike rivals AutoZone Inc. and Advance Auto Parts Inc., Pep Boys has not benefited from a resurgent U.S. auto industry due to high costs eating into its earnings and falling sales at its do-it-yourself business.

The Wall Street Journalreported in May that private equity firm Golden Gate Capital and other suitors had expressed interest in buying the company.